"We are grateful for the support of so many in the community that enabled us to get to this milestone day," said Bob Dunn, the project developer. "I am particularly grateful to our investors, who stepped forward at a critical time to make the new Edgewater a reality."

The project includes the construction of a public terrace overlooking Lake Mendota, and a public stairway to the lake shore and the Edgewater Pier.

For now, 65 Edgewater employees will lose their jobs when the hotel closes next week for remodeling.

Approximately 700 jobs will be created for the construction period and more than 250 permanent jobs will be created when it opens, according to developers.

The $98 million renovation is officially under way after five years of red tape, debates and lawsuits.

"It seems like one ought to be able to get a project done more quickly than that," Dunn said.

The controversial project faced opposition from some residents, who argued that the plan for the Edgewater, particularly the proposed nine-story tower, was a poor fit for the historic Mansion Hill neighborhood and violated building ordinances in the area.

The so-called "Madison process" nearly killed the grand idea. One of the biggest blows was a Madison Common Council vote last year that slashed $16 million in promised public funding to $3.3 million.

"It was certainly the low point, but we learned shortly thereafter that there are people in this community who are really committed to seeing Madison continue to evolve and grow," Dunn said.

With a group of investors, led by Madison philanthropists Jerry Frautschi and Pleasant Rowland, and with support from a federal financing program created to help alleviate losses from flooding in 2008, the new Edgewater will feature a public terrace, public lake access and a new nine-story hotel tower.

Developers said the original hotel will be restored to the Art Moderne style of the 1940s era in which it was constructed.

City leaders said they hope this journey, while at times heated and rocky, will bring a new vision to the city.

"This project has been a long journey," said Alderwoman Bridget Maniaci. "Cities really are successful with they invest in people and ideas."

The Edgewater will completely shut down next week and re-open in September 2014.

Madison Mayor Paul Soglin, a critic of public financing for the public, was invited to Thursday's groundbreaking ceremony, but a representative said he was unable to attend.

Copyright 2012 by Channel 3000. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.